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A V CONSULTANTS Top Tax Consulting and Financial Services in Hyderabad

  1. Taxation And Financial Services
  3.  An Overview on Indian Economy  Present TaxStructure in India & Problems thereon  Concept of GST  Features of GST  Fundamentals of GST  Supply Chain of GST  GSTFAQs  GSTRegistration Procedure  GSTReturns and Periodicity  Overall Benefits of GST Presentation Contents
  4. India’s Economy is the seventh largest economy in the world measured by nominal GDP. The country is classified as newly industrialized country , one of the G- 20 member, a member of BRICS and a developing economy with an average growth rate of approximately 7% over the last two decades. The Indian Economy has the potential to become the world’s 3rd Largest Economy by the next decade. Agriculture, Service and Industry are the major sector of Indian Economy. India has one of the fastest growing service sectors in the world which contributed to more than 57% of GDP An Overview on Indian Economy
  5. Present Tax Structure IndirectTax Excise Duty Taxable Event is Manufacture ServiceT ax Taxable Event is Provision of Service Sales T ax/ VAT/CST Taxable Event is Sale Customs Duty Taxable Event is Import & Export Other Indirect Taxes like Entertainment Taxes,Lottery Taxes Direct Tax Present Tax Structure in India
  6. Complex Tax System and Lacking stability. Multiplicity of Duties / Taxes Cascading Effect of Taxes Lack of uniformity of Provisions in State VAT Statues Exclusion of Services from State Taxation Problems with Present Indirect Tax Structure
  7. GST – The Solution to India’s Tax Problems A Common Tax on Introduction of GST Services Goods &
  8.   GST is a single unified taxation system aiming to remove geographical barriers for trading and transform the entire nation into “One Common Market Place”. GST is a tax on goods and services with comprehensive and continuous chain to setoff benefits from the Producer’s Point and Service Provider’s Point up to Retailer Level.  It is a Destination Tax similar to consumption tax . It is applied on the goods & services when a consumer buys them.  It is based on duality concept of tax system. Under this system, tax is administered, collected and shared by both the Central and State Governments based on the nature of transaction i.e. inter state or intra state. Concept of GST
  9. Features of GST  Destination based Taxation  Apply to all stages of the valuechain  Apply to all taxable supplies of goods or services (as against manufacture, sale or provision of service) made for a consideration except– o Exempted goods or services –common list for CGST& SGST o Goods or services outside the purview ofGST o Transactions below thresholdlimits  Dual GSThaving two concurrent components – o Central GSTlevied and collected by the Centre o State GSTlevied and collected by the States
  10. Fundamentals of GST CGST • CGST stands for Central GST. • It is levied by the Center through separate statute on all transactions. • Tax collected will be shared to Central Government • Input Tax Credit of CGST is to be adjusted with CGST and IGST. SGST • SGST stands for State GST. • It is levied by the States. • Tax collected will be shared to State. • Input Tax Credit of SGST is to be adjusted with SGST and IGST IGST • IGST stands for Integrated GST. • This is applicable on interstate and import transactions. • Tax is levied by Central Government & the tax collected is shared between Central and State Government. • Input Tax Credit of IGST is to be adjusted with IGST, CGST, IGST.
  11. Subsuming of Existing Taxes • Central Excise • Service Tax • Additional Custom Duty (CVD) & SAD • Surcharges and Cess Central Taxes • VAT/sales tax • Entertainment Tax • Luxury Tax • Lottery Tax • Entry Tax • Purchase Tax State Taxes • CST Inter State Taxes
  12. Taxes which are not to be subsumed Basic Custom Duty Road & Passenger Tax Toll Tax Stamp Duty Electricity Duty Exports Duty (export of certain goods which are not available in India in abundance)
  13. Supply Chain of GST Simple Structure of GST Chain Supply of Goods GST Flow GST Collected A manufacturer of Fabric Material sells fabric to tailor for Rs. 100 The manufacturer pays GST of Rs. 10 (say) 10 The tailor purchases fabric at Rs. 100 and adds value of Rs.30 and sell it to wholesaler at Gross Value of Rs. 130 The tax on output will be 130*10%=13 but the tailor has already paid tax of Rs. 10 so, net GST payable is Rs. 3 (13-10) 3 The wholesaler buys shirt for Rs. 130 and adds value of (i.e. min margin) Rs. 20 and sell it to retailer for Rs. 150 The tax on output will be 150*10%=15 . Net GST Payable = 15-13=2 2 In final stage , a retailer buys the shirt from wholesaler for 150 and adds his margin of Rs. 10 (say) and sell to buyer at Rs. 160 The output tax will be 160*10%=16 Net GST payable=16-10-3-2=1 1 TheStbuutiyerbuys shirt at Rs. 160 T otal GST payable by buyer=10+3+2+1=16 and no Credit is available to him
  14. GST Scenario At a Glance Input Service Provider Output Service Provider Consumer CGST = 10 CGST ITC = 11 = (10) 1 Tax Invoice (A) Tax Invoice (B) Cost = 100 Central Tax = 11 ( 10 + 1) State Tax = 11 ( 10 + 1) SGST = 10 SGST ITC = 11 = ( 10) 1 = 10% = 10% = Input Tax Assumption SGST Value Addition ITC Credit Value = 100 Gross Value =110 CGST = 10 SGST = 10 CGST = 11 120 SGST = 11 132
  15.  How will GSTbenefitConsumers? InGST,consumers will be benefitted mostly in two ways:- Firstly, all taxes will be collected at the point of consumption and transparency on taxation imposed. Secondly, once the barrier between States are removed, consumers will not end up paying “tax on tax”. Why is Dual GSTrequired? India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. So, Dual GST is introduced with the Constitutional requirement of fiscal federation. GST - FAQS
  16. Who is liable to be registered under GST? Under GST, every assessee shall be liable to be registered in the state from where he makes taxable supply of Goods and Services if his aggregate turn over in a financial year exceeds RS. 20 Lakhs (threshold exemption Rs. 10 Lakhs for NE states). Irrespective of threshold exemption following categories of persons are required to be compulsorily registered:- o Persons making any inter state taxable supply; o Casual Taxable Persons; o Persons who are required to pay tax under reverse charge; o Non-Resident Taxable Persons; o Persons who supply goods/services on behalf of other taxable persons whether as agent or otherwise; o Input Service Distributer; o Every Electronic Commerce Operator; o Every Person supplying online information and database access or retrieval services from a place outside India to a person in India, other than registered taxable person; o Person who is required to deduct TDS u/s 37 of the ACT. o Such other person or class of persons as may be notified by the Central Government or a State Government on the recommendation of the Council GST - FAQS
  17. What is Aggregate Turnover under GSTACT? Aggregate Turnover” means the aggregate value of :- All supplies whether taxable or non-taxable, made by taxable person , whether on his account or made on behalf of all his principals ; of a person having the same PAN. Aggregate Turnover does not include value of all supplies on which tax is levied on reverse charge basis and value of inward supplies. What is the time limit for taking Registration? Any person should take a Registration, within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed. GST - FAQS
  18. What are the tax rates in GST? Tax Rates in GST:- o Merit Rate: Essential Goods and Services o Standard Rate: o Special Rate: Goods or Services in general Precious Metals o Nil Rate: Exempted Goods or Services o Under Compounding Scheme o Tax Rate is 1% (as decided by GST Council) and input tax credit is not claimable under this scheme. o There is ZERO RATE GST to exporters of Goods & Services. GST - FAQS
  19. GST Registration Procedure
  20. Whether all assessees/dealers who are already registered under existing Central Excise, Service Tax, VAT, will have to obtain fresh registration of GST?  No, GSTN shall migrate all such existing tax payers to the GSTN network and department shall issue GSTIN and password.  Existing tax payers is an entity currently registered under acts as specified below;  Central Excise  Service Tax  VAT (except exclusive liquor dealers if registered under VAT)  Entry Tax  Luxury Tax  Entertainment Tax (except levied by the local bodies)
  21. GSTIN Format of GSTIN 22 AAAAA0000A 1 Z 5 STATE CODE PAN Entity Number of the same PAN holder in a state By default Check Digit Each Tax Payer will be allotted a State wise PAN based 15-digit Goods and Services Tax Payer Identification Number (GSTIN). During Migrating Process (Enrollment) to GSTN the data of existing tax payers is validated. For the purpose of enrollment, GST System portal has been created and after enrolment Assessee will be enabled as a registrant for GST Compliance requirement viz return filing, tax payment etc.
  22. Information Required for Enrollment with GST System Portal:- Provisional ID received from State/ CentralAuthorities Password received from the State/CentralAuthorities Valid Email Address Valid Mobile Number Bank Account Number Bank IFSC Documents Required for Enrollment with GST System Portal:- Proof of Constitution of Business (Deed/RegistrationCertificate) Photograph of Promoters/Partners/Karta of HUF Proof of Appointment ofAuthorized Signatory Photograph of Authorized Signatory Opening page of Bank Passbook/ Statement containing Bank A/c Number, BranchAddress,Address of Account holder and few transaction details Note: DSC is mandatory for enrollment of Companies, LLPs and for other tax payers DSC is optional. After enrollment Final Registration Certificate will be provided to the assesee after verification of documents (within 6 months) by proper officer center/state of concerned jurisdiction after appointed date. One Pan allows one GST Registration in a state and if assessee has multiple businesses in one state then assesee may register one business entity at first and for remaining verticals within the State assessee has to get in touch with JurisdictionalAuthority.
  23. GST Returns Who needs to file Return in GST Regime? Every registered person is required to file return for the prescribed tax period. A return needs to be filed even if there isno business activity (i.e. Nil Return) during the said tax period of return. It does not matter whether you are atrader, manufacturer, reseller or a service provider, you only need to file GST returns. What are the features of GST Returns? o Filing of returns would only be through online mode. oFacilities of offline generation and preparation of returns will also be available but the returns prepared in offline mode will have to be uploaded. o There will be a common e- return for CGST, SGST, IGST and Additional Tax. oThere would be no revision of Returns. Changes to be done in subsequent returns and all unreported invoice and ITC revision will have to be corrected using debit/credit note. These credit/debit notes would be
  24. GST Returns and Periodicity  There are 19 forms for filing returns of GST by tax payers.  For Regular Dealer Form Type Frequency Due Date Details to be Furnished Form GSTR-1 Monthly 10th of succeeding month Furnish details of outward supplies of taxable and /or services affected Form GSTR-2A Monthly 11th of succeeding month Auto-populated details of inward supplies made available to the recipient on the basis of Form GSTR-1 furnished by the supplier Form GSTR-2 Monthly 15th of succeeding month Details of inward supplies of taxable goods and/or services claiming input tax credit. Addition (Claims) or modification in Form GSTR- 2A should be submitted in Form GSTR- 2. Form GSTR-1A Monthly 20th of succeeding month Details of outward supplies as added, corrected or
  25. GST Returns and Periodicity Form Type Frequency Due Date Details to be Furnished Form GSTR-3 Monthly 20th of succeeding month Monthly return on the basis of finalization of details of outward supplies and inward supplies along with the payment of amount of tax Form GST-ITC-1 Monthly 11th of succeeding month Communicationof acceptance, discrepancy or duplication of input tax credit claim Form GST-3A Monthly 15th of succeeding month Notice to a registered taxable person who fails to furnish return under section 27 and section 31 Form GSTR-9 Annually 31st December of Next Fiscal Annual Return – furnish the details of ITC availed and GST paid which includes local, interstate
  26. GST Returns and Periodicity Tax Deductor Form Type Frequency Due Date Details to be Furnished Form GSTR-7 Monthly 10th of succeeding month Furnish details of TDS Deducted Form GSTR-7A Monthly TDS Certificate to be made available for download TDS Certificate – capture details of value on which TDS is deducted and deposit on TDS deducted into appropriate Govt.
  27. GST Returns and Periodicity Aggregate Turnover Exceeds 1 Crore Aggregate Turnover Exceeds 1 Crore Form Type Frequency Due Date Details to be Furnished Form GSTR-9B Annually Annual, 31st Dec of Reconciliation Statement – audited annual accounts and a reconciliation statement, duly certified. next fiscal E-Commerce Form Type Frequency Due Date Details to be Furnished Form GSTR-8 Monthly 10th month of succeeding Details of supplies effected through e- commerce operator and the amount of tax collected on supplies
  28. GST Returns and Periodicity Foreign Non-Resident Tax Payer Aggregate Turnover Exceeds 1 Crore Form Type Frequency Due Date Details to be Furnished Form GSTR-11 Monthly 28th of succeeding month Details of inward supplies to be furnished by a person having Unique Identification number Form Type Frequency Due Date Details to be Furnished Form GSTR-5 Governmen Monthly t Departments and 20th of succeeding month or within 7 days after the expiry of registration UN Bodies Furnish details of imports, outward supplies, ITC availed, tax paid, and closing stock.
  29. GST Returns and Periodicity  Composite Tax Payer Form Type Frequency Due Date Details to be Furnished Form GSTR-4A Quarterly 10th of succeeding month Details of inward supplies made available to the recipient registered under composition scheme on the basis of Form GSTR- 1 Furnished by the supplier Form GSTR-4 Quarterly 18th of succeeding month Furnish all outward supply of goods and services. This includes auto populated details from Form GSTR-4A, tax payable and
  30. GST Returns and Periodicity Input Service Distributor Aggregate Turnover Exceeds 1 Crore Form Type Frequency Due Date Details to be Furnished Form GSTR-11 Monthly 28th of succeeding month Details of inward supplies to be furnished by a person having Unique Identification number Form Type Frequency Due Date Details to be Furnished Form GSTR-5 Governmen Monthly t Departments and 20th of succeeding month or within 7 days after the expiry of registration UN Bodies Furnish details of imports, outward supplies, ITC availed, tax paid, and closing stock.
  31. GST Returns and Periodicity Final Return For Taxable Person Whose Registration has been surrendered or cancelled Aggregate Turnover Exceeds 1 Crore Form Type Frequency Due Date Details to be Furnished Form GSTR-10 Monthly Within 3 months of cancellation of registration Furnish details of inputs and capital goods held, tax paid and payable.
  32. How to File Your GST Returns??? Bill No. Customer Bill 1 A B Ltd Bill 2 Q P Ltd. Bill 3 C-02 Ltd. Bill 4 J K Ltd. Let Us take Example of a Dummy Company Out Ward and Inward Supply Details of Furniture Ltd. ForApril Bill No. Supplier Bill 25 R J Ltd Bill 45 D Ltd. Bill 02 Z Ltd. Bill 50 D Ltd.
  33. On 10th May – F Ltd. Uploads GSTR-1 with its outward supply bills . Also the suppliers RJ, D and Z also uploaded GSTR-1
  34. On 11th May, F Ltd. bills through View their inward Form GSTR-2A which is auto populated
  35. On 11th to 15th of May, F Ltd reconciles the bills shown in Form GSTR-2A by his suppliers, with their books During Verification, F Ltd finds that Bill 50 (purchase from D Ltd. ) is not reflecting in Form GSTR-2A
  36. On 15th May, F Ltd. Uploads the missed out bill (Bill No.50) in Form GSTR-2 which will be made available to D Ltd. In GSTR-1A
  37. Between 16 to 20 May, D Ltd. Verifies and accepts Bill 50. The accepted bill will be amended in Form GSTR- 1accordingly
  38. On 20th May, Automated Return Form GSTR-3 is available to F Ltd. For Submission and Payment
  39. In overall what Benefits we are going to achieve by application of GST???  Easy Compliance  Simple to Administer  Uniformity of tax rates and structures  Removal of Cascading  Better Control on Leakage  Improved Competitiveness  Gain to Manufacturers and Exporters  Relief in overall tax burden of consumers
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